Blue Cross Blue Shield patients in Winslow face a major insurance deadline today as Little Colorado Medical Center (LCMC) and Blue Cross Blue Shield of Arizona continue a contract dispute that could leave the region’s only hospital out of network for thousands of local patients.
LCMC Chief Executive Officer Travis Udall told the Winslow City Council last week that the situation was still moving and that a recent meeting with Blue Cross had gone better than prior talks. “We get a lot of questions on the Blue Cross negotiations,” Udall said. “We had a meeting today, which is probably the most positive meeting we’ve had in a year.” Udall said the hospital had sent its final proposal back to BCBS and was waiting for a response. He told council members he hoped the issue could be settled before the July 1 deadline. At the time of printing an agreement has not been announced.
For now, LCMC remains in network with Blue Cross for the time being and it is hoped any disruption would have minimal to no impact on patients. But the hospital administration also urged patients to prepare in case the contract lapses, because the financial difference between in-network and out-of-network care can be significant.
For local patients, the stakes are higher than they would be in a larger city. LCMC is Winslow’s only hospital and the next full hospital is over 50 miles away in Flagstaff. Residents on the reservation may have to travel even farther to Show Low or Flagstaff to receive in-network care. For many residents, especially those in an emergency or those receiving ongoing care, simply choosing another in-network hospital may not be realistic.
In a public notice to patients, Udall said LCMC’s Board of Directors concluded that the reimbursement levels offered by Blue Cross, “would not support the essential health services that our community needs.” The hospital says the issue is not just a business disagreement but a question of whether a small rural hospital can continue providing services that are costly, necessary and not always fully covered by insurance payments.
That concern was echoed in Udall’s broader report to the council. He said LCMC is trying to grow and stabilize services by hiring local people, bringing new care options to Winslow and keeping more patients in town rather than transferring them away.
“One of the things that I feel strongly about as the CEO is that we hire local people,” Udall said. “That our hospital, the strength of our facility will be based off the local people that we hire that stay here, build here, that live here.”
The insurance fight comes as LCMC is trying to preserve some of the most expensive services it offers. Udall told council members the hospital is seeking rural transformation funding from the state, including support for women’s health and obstetrics. He said LCMC loses nearly $1.5 million a year on obstetrics services because reimbursement rates do not cover costs and liability insurance is among the highest expenses in the hospital.
Udall told the council, “The liability insurance is the highest across the hospital. It’s very costly for the babies. But I think it’s something that we’re connected to because it’s something that this area needs.”
Udall said LCMC is one of only three small hospitals in the state continuing to provide OB care in that category and said the hospital is seeing more patients from the Show Low and White Mountain area as other regional options have become limited. Without the service in Winslow, he said, families would have to travel farther for care.
LCMC is also applying for funding for a mobile clinic that could serve Holbrook, Joseph City and Happy Jack, areas where Udall said a permanent clinic would be difficult to establish. He said he had spoken with Holbrook Mayor Kathleen Smith about the idea of taking a clinic to Holbrook a couple of days at a time to provide services and connect patients back to the hospital in Winslow.
Udall said LCMC has also regained its Level IV trauma designation, which had lapsed before he arrived. He said the designation matters because it can affect access to supplies, funding, equipment and state resources and the hospital now plans to pursue Level III trauma status.
Udall said another priority is keeping more patients in Winslow instead of transferring them to Flagstaff. “One of the things that I think is an issue for our hospital when I got here I heard loud and clear, is that a lot of times people come to the hospital and they get transferred away to Flagstaff,” Udall said.
Council members praised the hospital’s improvement during the meeting and one raised the issue of dialysis patients still having to be transferred out. Udall said LCMC had investigated dialysis, bought equipment and considered the service but could not get the necessary staff training and encountered complications involving the local dialysis center. He said dialysis remains on the list but the hospital must make sure it can provide services well before adding more.
Udall said LCMC has added seven or eight outpatient services in the last 18 months, including swing bed, pain management, stroke and telemental health programs. He also said the clinic has added 7,000 new visits this year, which he attributed to marketing, changes in patient service, better communication and efforts to rebuild trust.
“We’re seeing that volume come back from Holbrook, Joe City, the Snowflake areas, where we have lost that,” Udall said.
For BCBS patients, the hospital’s advice is to contact the insurer directly. Patients should call the member number on the back of their Blue Cross Blue Shield card and ask how services at Little Colorado Medical Center, the rural health clinic and the physical therapy clinic will be covered if LCMC is treated as out of network.
Patients should also ask about their specific deductible, coinsurance and out-of-network benefits and should request written confirmation from Blue Cross. If a patient is in active treatment, including pregnancy, post-surgical recovery, chemotherapy or other ongoing care, they should ask BCBS about continuity of care before receiving a bill.
Emergency care is different. Under federal patient protections, emergency care is generally billed at in-network cost-sharing levels even if the hospital is out of network. LCMC and patient advocates are stressing that patients should not drive to Flagstaff or another hospital during a true emergency because of the insurance dispute.
Non-emergency care may be different if the contract lapses. Scheduled visits, follow-up appointments, clinic visits, physical therapy or other non-emergency services could come with higher out-of-pocket costs depending on a patient’s individual plan.
LCMC has said it will work with affected patients and is offering a 40% discount on out-of-network cost sharing, along with cash and prompt-pay discounts, to help offset added costs during the dispute. The hospital also has financial assistance and sliding-fee programs and says no one is denied care because of inability to pay.
Patients with questions for BCBS can call 1-800-232-2345 or submit a request through. www.azblue.com. Patients with billing questions for LCMC can contact the hospital’s Billing and Patient Financial Services office at 928-289-6369 from 8 a.m. to 5 p.m., Monday through Friday or by emailing businessoffice@lcmcwmh.com. The hospital’s main line is 928-289-4691.
Udall told council members that trust is central to the hospital’s future and said LCMC is trying to respond more directly when patients have problems. He said he and other hospital leaders are willing to meet with patients, hear what happened and try to fix what the hospital can fix.
The council also opened public hearings on the city’s final budget for fiscal year 2026-27 and the estimated tax levy, which was broken down in an article in the May 13, edition of The Tribune. City Manager David Coolidge said the final budget was identical to the tentative budget previously presented to the council, with “no changes, no reductions” and no members of the public spoke during either hearing. The budget was officially adopted during a special meeting held shortly after the regular meeting last week.
Coolidge also gave a legislative update after the end of the state session, saying the state budget signed June 13 includes tax conformity provisions tied to the federal H.R. 1 bill that are expected to reduce Winslow’s state-shared revenues by about $100,000 per year. He said that may not sound large in an $11 million budget but “that’s one to two employees,” and he also noted a state backfill for 911 system costs, a three-year moratorium on data center tax incentives and a November ballot expected to include 10 referendums, including one that would cap grocery taxes at 2%.
The city also received its May financial report. As of May 31, with 92% of the fiscal year complete, citywide revenues for May were $2 million bringing year-to-date revenues to $24 million while citywide expenditures for May were $2.7 million, bringing year-to-date expenditures to $23.5 million. General fund revenues were at 110% of budget and expenditures were at 98% of budget and total cash and investments stood at $16.4 million.
During the meeting the council also approved past meeting minutes, the check register and cancelled the Aug. 25, regular meeting.
